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Comment by rgmerk | Hacker News Reader

For those unfamiliar Argentina was, at the start of the 20th century, among the richest countries on Earth.

After many decades of mismanagement, it has a GDP per capita roughly equal to the likes of Mauritius (which 30 years ago was a far poorer place).

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The "among the richest countries on Earth" statement is frequently trotted out, but I think it's kind of misleading. Argentina was rich largely because it had lots of raw materials and agricultural products that, at the time, could be exported at high prices. That's great while it lasts, but it doesn't necessarily lead to a long-term sustainably rich country.

Why it is misleading? I didn’t get your point here.

feet of clay

IMO when people say "one of the richest countries on Earth" the mental model is the United States or the European Union countries whose wealth is kind of self-sustaining at this point. Like it would take many massive proactive mess ups for the US not to be so wealthy.

This does not describe Argentina in the early 1900s because the country's wealth was mostly from raw resource exports which are always unstable. It's like Venezuela being (relatively) wealthy from oil is the early 2000s. In this case transitioning from "one of the richest countries on Earth" to poor doesn't require you to mess up proactively - if the price of oil swings the wrong way, you're suddenly poor, as for Venezuela, without doing anything wrong yourself.

> This does not describe Argentina in the early 1900s because the country's wealth was mostly from raw resource exports which are always unstable.

At the start of the 20th century, Argentina and Australia were in rather similar situations: southern hemisphere countries with mostly European settler ancestry, and an economy dominated by exports of agriculture and mining. And yet, across that century, Australia's economy just went up and up, while Argentina's stagnated (especially post-1950). Yes, Australia was also faced with instabilities from resource export prices, but it managed to weather them. Why?

The fundamental difference between Argentina and Australia is Australia had much better economic management. And a big factor behind that, is it also had much better political stability. Which could be (at least partly) due to differences in political systems (parliamentary for Australia, presidential for Argentina) and political cultures (British-derived vs Latin American)

While it’s undoubtedly an oversimplification this short podcast covers some of the key differences:

https://www.abc.net.au/listen/programs/abc-news-daily/iyl-ar...

Companion article covering the same ground in text format: https://www.abc.net.au/news/2023-08-13/how-did-argentina-end...

I agree it is an oversimplification - yes, in 1951, Artie Fadden was making sensible (even if unpopular) economic decisions in Australia, while Perón was making foolish (albeit popular) economic decisions in Argentina. But the same pattern has been repeated many times since. If Argentina had learned its lesson from Perón‘s mistakes and chosen not to repeat them, it would be in far better economic shape today - arguably much closer to where Australia is. Instead, it has chosen to repeat them again and again and again

You're right it doesn't necessarily lead to long-term sustainability, but it is a strong economic lever if used correctly. Argentina was considered equally rich to Canada before WWII [1], and though Canada benefitted greatly from it's proximity to the US, Australia, has also managed their resources well, even though it is geographically challenged.

This is compared to Argentina's mismanagement of finances and resources, which is what is being measured.

https://www.vaia.com/en-us/textbooks/economics/macroeconomic....

Yeah, so was Australia. But Australia is now roughly as rich as, say, Germany, whereas Argentina is...not.

Most of that is down to bad policy from Peron onward.

Someone pointed out to me fairly recently that Argentina used to have a massive amount of sea-trade passing by, as ships went south through the Magellan straight.

Then in 1914 the Panama canal opened. And these once busy sea ports that anchored these countries to the world order faded.

I'm not saying there weren't decades of mismanagement nor oligarchic control or whatever (I have no clue). But the canal changed the geo-political lay-up severely, & with enormous suddenness; it's impossible for me to see how these countries were going to maintain position/status/wealth after a physical shortcut was built cutting them off from global traffic.

  among the richest

"among" is doing a lot of lifting in the sentence. It's a myth really. GDP estimations back then are really not reliable. Also, population was around 1 million, it's one of those typical statistical aberrations.

I mean India was the richest country on earth for most of human civilization. What’s your point?

Argentina was one of the richest on a per-capita basis, ahead of France, Germany, and Italy. India was never rich on a per-capita basis: https://www.livemint.com/Opinion/Nb7KkZ3yOVSNW3vHf9K1oM/Worl.... For example during Roman times India had a lower GDP per capita than Italy, and it remained at basically the same level until the 20th century.

That’s a function of having very few people. Ireland is the richest on a per capita basis, it doesn’t really mean much.

it's very funny when people bring up this kind of static nonsense. Milei himself says he wants to turn the country into Ireland.

What does static mean in this sentence?

it's a typo, sorry. I meant "statistical"

This is false and for some reason repeated over and over again on the internet.

Argentina was never a rich country and at its highest point in per-capita wealth most of it was concentrated in a few land-owning oligarch families while the rest of the population lives in the abject poverty that was common in the rest of the Americas at the time.

So not unlike America during the robber baron era!

which robber baron era ¬_¬

> The massive wave of European immigration they promoted—second only to the United States'—led to a near-reinvention of Argentine society and economy that by 1908 had placed the country as the seventh wealthiest[65] developed nation[66] in the world.

https://en.wikipedia.org/wiki/Argentina

The data uses the Maddison database, which is incomplete and imprecise.

https://chequeado.com/ultimas-noticias/javier-milei-la-argen...

That’s not accurate. For example, Argentina’s infant mortality rate in 1915 was 134 per 1,000, similar to France and lower than the US.

This information uses what are considered archeological time series that are not precise enough to derive direct comparisons between countries.

If every village has 1 cow and it takes 3 years to produce the first calf, how do you show growth in the meantime?

You steal cows from the neighbouring villages.

Therefore some villages have fantastic GDP growth.

So much so they start an IMF to lend stolen cows back to these unenlightened villages as long as they pay interest or cut wages or sell off more of their assets.

Google "Super Imperialism"

Argentina is one of the world's largest beef exporters.

No one forced them to borrow from the IMF. They always had the option of reducing spending or increasing taxes to balance their budget.

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